Correlation Between KT Hitel and Tway Air
Can any of the company-specific risk be diversified away by investing in both KT Hitel and Tway Air at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KT Hitel and Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Hitel and Tway Air Co, you can compare the effects of market volatilities on KT Hitel and Tway Air and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KT Hitel with a short position of Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Hitel and Tway Air.
Diversification Opportunities for KT Hitel and Tway Air
Average diversification
The 3 months correlation between 036030 and Tway is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KT Hitel and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air and KT Hitel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KT Hitel are associated (or correlated) with Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of KT Hitel i.e., KT Hitel and Tway Air go up and down completely randomly.
Pair Corralation between KT Hitel and Tway Air
Assuming the 90 days trading horizon KT Hitel is expected to under-perform the Tway Air. But the stock apears to be less risky and, when comparing its historical volatility, KT Hitel is 1.37 times less risky than Tway Air. The stock trades about -0.05 of its potential returns per unit of risk. The Tway Air Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 311,500 in Tway Air Co on November 8, 2024 and sell it today you would earn a total of 29,000 from holding Tway Air Co or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KT Hitel vs. Tway Air Co
Performance |
| Timeline |
| KT Hitel |
| Tway Air |
KT Hitel and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Hitel and Tway Air
The main advantage of trading using opposite KT Hitel and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Hitel position performs unexpectedly, Tway Air can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tway Air will offset losses from the drop in Tway Air's long position.The idea behind KT Hitel and Tway Air Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tway Air vs. Woori Technology | Tway Air vs. HB Technology TD | Tway Air vs. Netmarble Games Corp | Tway Air vs. Global Standard Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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